Coming to Grips with the Bailout

At least one conservative blogger is starting to see the ramifications of letting the auto industry die a sudden and unceremonious death (others, not so much)...

But, of course, it will get much worse than just people collecting unemployment checks and state governments losing income and corporate tax revenue. The Milwaukee Journal-Sentinel actually did a really great job describing how awful the closing in Janesville will be this weekend.

The suppliers and the retailers et al. will likely have a ton of loans themselves that they will no longer be able to pay them off. Unable to find jobs, they'll default on their mortgages, car loans or credit card debt. Homes will be foreclosed thus depreciating the values of the homes owned by non-auto industry employees. Everyone stops sending money like they did just weeks earlier and area businesses bare the brunt of the new frugality. More people are laid off, more businesses close.

Without a job or a home and likely having filed for bankrupcy, there will be little reason for ex-auto industry employees to stick around in their old neighborhoods. A mass migration will begin from former auto industry communities around the Midwest that will decimate entire cities in Michigan and Ohio (as well as other places like Janesville), turning them all into smaller Youngstowns. This will all come at a time when private investment will slow to a grinding halt as banks on Wall Street get their shit together and governments will be strained by declining revenue and peaking demand for social service programs. Crime inevitably starts to rise and is perpetuated because local police forces don't have the resources to deal with the surge. Property values continue to decline. People with the resources to get the hell out eventually do, thus depriving the communities with tax revenue and leadership.

And that's just scratching the surface...

But if worrying about what can actually happen in the real world does start your engine as much as worrying about ideology or politics then folks who oppose the bailout (who appear to be mostly of the very conservative and/or libertarian persuation) might want to think about this:

The above will occur in plenty of states, but the effects will be felt most accutely in Michigan and Ohio and the unions in those states will not be blamed, especially when the optics the GOP is putting forth right now are pitting the unions against a handful of Senators with Southern accents and a ton of foreign, non-union automotive plants in their backyards.

Try winning a presidential election in the future without Ohio. Right now the GOP is kissing the industrial Midwest good-bye for a generation and retreating to the last redoubt it has in the country: the Southeast. There's been talk of the GOP becoming a regional party for some time now, but this may be the issue that final cements their doom.